Domestic equity markets saw the return of bears on Friday as headline indices along with broader markets closed deep in red. S&P BSE Sensex is currently placed at 57,197 points while the Nifty 50 index is at 17,171 — both down more than 3.5% during the previous week. Entering the first trading session of the week SGX Nifty was down deep in red, falling nearly 200 points. Global cues were also weak with major Asian stock markets down in the red. Chartists believe the short-term trend for Dalal Street could be negative after Friday’s fall.
Global watch: On Friday, Wall Street equity indices closed deep in the red with Dow Jones tanking 2,82%, followed by S&P 500 and the NASDAQ. Asian markets were seen mirroring the weakness in global equities with Shanghai Composite, Hang Seng, Nikkei 225, TOPIX, Kospi, and KSODAQ all trading with losses on Monday morning.
What do the charts say: Nifty on the weekly chart formed a doji type candle pattern (not a classical one, as the open and close of the week are not identical) at the valuation support of 17150 levels, said Nagaraj Shetti, Technical Research Analyst, HDFC Securities. “Normally, a formation of doji after a reasonable decline or upmove signal impending reversal after the confirmation. This could bring some hopes for bulls to make a comeback from the lows in coming week,” he added.
Levels to watch out for: According to Ruchit Jain, Lead Research, 5paisa.com, last week’s low of 16824 remains important support as it is formed at the 50% retracement of the previous up move which also coincides with the ‘200 EMA’ on the daily chart. “A breach below this would lead to a correction towards the next retracement support which is placed around 16600. On the flipside, 17400 will be seen as an immediate hurdle which needs to be surpassed for positive momentum to continue,” he added. Nagaraj Shetti believes Nifty support is in the 17000-16800 range.
FII and DII trades: Foreign Institutional Investors (FII) were net sellers on all five trading sessions of the previous week. On Friday FIIs pulled out Rs 2,461 crore from domestic markets. Meanwhile, Domestic Institutional Investors (DII) were net buyers on all days of the week. On Friday DII bought stock worth Rs 1,602 crore.
Call and Put OI: For the monthly Futures & Options expiry, maximum call Open Interest (OI) is placed at 18,000 strike, followed by 17,500 and 17,400. Meanwhile, Put OI is the most at 17,000 strike.
